I just wanted to get this commentary in before the rest of the blogosphere jumps in on it: Blizzard is doomed, doomed I'm telling ya! They are losing subscribers to World of Warcraft! In yesterday's investors earning call they had to admit that instead of having 12 million subscribers, they are down to 11.4 million. That is a full 5% drop from the peak!!!! If they continue losing 150,000 subscribers per month, the last player will leave in summer 2017.

Clearly Blizzard is on the way to ruin, and the devs will soon have to sleep under bridges and warm themselves on campfires. Fortunately Activision has a lot of paper they can burn: 1,450,000,000 crispy dollar notes, their revenue for the last financial year. That should keep them warm for a while.

600k drop in the ~5.15 million WoW West market is a 12% drop. While the Chinese will always keep WoW the most successful MMO ever made, that means relatively little to anyone that reads your blog - our game experience will continue getting manifestly worse over time (emptying servers, ect) on top of Blizzard's asinine design philosophy this expansion.

Blizzard is not going to continue to dominate the market just as much as crappy pop music dominated the market. Blizzard is a successful company they make quality games. I love their RTS games, they are the best of that category. I love their Diablo branch it is an action game that you can enjoy for a little while.

However, I despise their World of Warcraft MMORPG but that doesn't mean they are not capable of making a better one (Titan). World of Warcraft is the most successful MMORPG in the history of this genre. Anyone who thinks WoW is doomed or mention a WoW killer doesn't understand how WoW actually became a success.

WoW success has nothing to do with the quality of the game in my personal prospective. WoW belongs to a specific MMORPG sub-genre that I don't like. Nothing wrong with that, I just don't like that sub-genre. Hoping to play an MMORPG that plays different than WoW (unlike Rift which is WoW 1.5).

There is also the typical pattern that sub numbers drop over time, then are replenished when an expansion comes out. This drop seems rather large and rather soon on the heels of Cataclysm.

It isn't the end of the world, but it is rather unpromising. I personally feel that Cataclysm has been a disappointment, but there is a lot of ruin to be had from a success as large as World of Warcraft.

Wow may be going downhill but I believe that an money they lose they are going to more then make up with their new mmo. I know several artists on the team and can tell you its going to blow shit out of the water.

Invester: "How are the subscribing numbers looking since the new expansion Tobold?"Tobold: "Great news sir, we're losing them at a rate of 120,000 per month!"Investor: "A word in my office please..."

Assuming the numbers haven't miraculously stabilised it's safe to assume that's 600k and rising. It'll be interesting to see what they are at the end of the year, maybe better to get them out now before they start to look really bad.

There are quite a lot of aspects to this. To the extent that the subscription loss is concentrated in the West, that may mean that the attrition rate is higher (up to 12%), and if sustained, might mean some servers getting a bit empty by year-end. But who knows if this reduction is the start of a trend, or just one quarterly blip. Only time will tell.

Revenues are up YoY, and although in the Q&A on the call the company dodged the question about revenues per user (ARPU), there are some hints that ARPU is up, i.e. selling more "value added" services. China value add is specifically mentioned for WoW. So maybe it's better for them to have 11m players with higher ARPU than 12m players with lower ARPU.

Finally, Blizz comment that players are consuming content faster. As a statement that's quite weak, but there is some additional comment in the transcript, Morhaime cites "increased player engagement and higher daily concurrency". I think in this context he means that in Cata players are logging on in more concentrated bursts at the same times. That might be consistent with people "consuming the content", in the sense that they are rushing through group content in a very determined way, but have less to do outside of that (few gameplay opportunities in non-concurrent time). I'm not sure if I interpreted that right though.

Even if Blizzard loses WoW customers they will more than make up for it in the new MMO or in Diablo III (with the 7 episodes they have in store ;)) so i really don't know to whom this post is intended...

At least wait until someone do "attacks" Blizzard before stepping up to defend it.

If I didn't know better I would say that you are actively fighting the slightest risk of negative perceptions on WoW.

1) I did not quite understand the "came during a slow point in the expansion" These are the numbers for the first full quarter after the expansion was released. I am not sure why people would think the second or third quarter after the expansion would be better. Wouldn't the first quarter be the peak for the expansion?

2) I was taught in business school that the first or even second derivative of market share provided more insight than absolute numbers. So it's not a significant decline, but declines are not good things.

3) During the night after last quarter's announcements, Activision shareholders lost a billion dollars of value. So clearly this was not as bad of an announcement as that. Tune in in 3 months for the Q2 announcements.

If we assume that thew grew subscriber numbers with the newly released WotLK in china then we could conclude that they've lost more then 600'000 in the western world. The sum of new subscribers in china and lost ones in the west is 600'000.

And the scary thing is that they don't know what to do. They just continue their failed way.

Do you really think a legendary weapon will bring anyone back? Not at all, it's exactly the elitist crap people don't like. Why should Blizzard invest time to create a lore rich story line and only a handful of people can see the quest line?

The quest line should be doable by everyone in the game, even if they won't give out the weapon to everyone. That was always a problem with those items. Not only can't you get the item, you're also locked out of the lore and quests.

And why give the whole raid a pet? Wouldn't it then make sense to give a legendary weapon to everyone with 130 pets? :) Why is there a need to devaluate pet collecting by giving special "pet collector loot" to raiders? With that they've just added pet collecting in the "raid or die" category...

I wonder what the numbers are for when subs dipped after original release, TBC, and wrath, especially compared to cata.

If I had to hazzard a completely uneducated guess, I would say that Blizzard is pretty smart to be working on titan. I think that, ultimately, each new expansion has diminishing returns in interest because you have two options, a lot of the same old with new spin or going completely outside the box. And that latter option, instead of slowly killing your game, very, VERY quickly kills it.

There is probably some ideal cycle where you only make X expansions before it is no longer worth it because you just won't get enough out of the hard work and you are better off making a new game.

I'd bet money that the next wow expansion will be the last one. The question is will it be a radical change, or will Blizzard try and give WoW a dignified death by just making it a normal expansion, still improve what they can but don't get radical, and try and plan the final content patches to provide a story "conclusion".

Which still won't be the death of wow. God knows there will be millions of players far into the future, and more importantly, I guarantee they will keep providing content patches every now and then even after they reach the point where WoW becomes their second priority after titan. What they did with Diablo 2 1.10 patch shows that if nothing else: They are committed long term, far past when the game is no longer the focus.

The real question for me is the timing of these losses. My "gut feeling" (with, unfortunately, no date besides doing lots of /who commands on my own server) is that the losses have been growing lately rather than a steady trickle. A 12% decline of Western players is pretty scary... one that is a slope getting steeper is more worrisome. I'm seeing lots of what were "every night" players transitioning to "raid night only" players, and many of these raids are going only occasionally, unable to sub in replacements when primaries don't show.

I think saying "600K" is truthful, but is the best spin that Activision could put on the numbers. We'll have to see how many 6-month and 3-month subscribers drop out over the next period... someone can go totally inactive but still be "subscribed," at least until his sub runs out.

OK, let me rephrase it: I'm not surprised subs have fallen, everything post-cata and leading up to the announcement suggested they were falling, and I haven't witnessed or read anything to suggest they will stop falling.

My basic theory is that these numbers are probably a bit doctored. I know in the week before this statement both of my WoW accounts received "come back for 7 days" emails. Wondering if they are counting those people too. If they are willing to fess up to 600,000... I have to think the real number missing is probably higher.

We'd have to know more about who those 600,000 players are. If they're hardcore raiders, then I don't see much doom and gloom since they're a minority anyway. If they're casual players, that could be trouble. Worst case might be if they were perfectly normal average typical players which perfectly represent the population as a whole. In that case, the entire population could notice a downward trend and nothing kills a market faster than expecting it to go down.

Personally for me Cataclysm was a disappointment. The linear level 81-85 zones are only fun once, and have lousy replay value for alts. Heroics and raids are twitchier than ever, and just not fun to me any more.

Having said that, this complete "failure" called Cataclysm probably earned Blizzard around half a billion dollars, counting the box sales and 6 months of added subscriptions on average for just the American and European players. I don't know why pointing out facts is considered as "defending Blizzard", but I just find it interesting that they make more money with a "failed" expansion than other companies with their whole game.

Despite obviously not being a sign of doom since they're bigger than the rest of the industry combined, it is a rather monumental event in WoW's history. They're probably on a long glidepath to their next MMO release.

@Angry Gamer: Maybe the stock is realistically priced for the demand and therefore could not be expected to move much. Or the markets are awful at evaluating tech companies.

Maybe their assets are going down because they're pouring money into Titan, which will not be a valuable asset, probably not even declared, until they're ready to show it to the world. Pay a programmer and you're losing money, despite him producing a valuable asset with his skills.

That is true on the surface. But Activision reports itself as a "Multimedia & Graphics Software"

company not really a "tech company"http://finance.yahoo.com/q/pr?s=ATVI+Profile

in any case I have reviewed many company's financial filings and ATIV is pretty dense on what they are doing.

I always assumed the low stock price was because the analysts could not interpret their WOW revenue model. Now I'm not so sure because their Dec 10 filling was a disaster. They seemed to write off a lot that quarter now they are writing more off and announcing record revenue.

The non-GAAP financial measures exclude the following items, as applicable in any given reporting period: the change in deferred net revenue and related cost of sales with respect to certain of the company’s online-enabled games;

AND this... we recognize revenue attributed to these game titles over their estimated service periods, which may range from five months to a maximum of less than a year.

So... Blizz thinks people will play 6 months LESS going forward than they thought 3 months ago

Regardless of the downward trend in subscriber numbers, Blizzard can easily "coast" on WoW's profits for the foreseeable future, certainly until "Project Titan" is in place. But I don't think even Blizzard can duplicate WoW's success. WoW became what it is because of a coming together of many factors, several of which had little to do with the game itself. I don't think we'll ever see another game with ten million subs, Titan included.

I sincerely hope blizzard is not doomed. i hope they continue to pump out content that occupies the masses for years to come and keeps them happy in their nice warm tubs of goo. i for one do not miss the taste of steak. long live WoW!

Sure Blizzard made a lot of money on Cataclysm, but that was due to riding off the reputation of past expansions. WoW's sub numbers will likely continue to decline, and they'll make much less on future expansions. Wow will remain profitable, so it's not the end yet. But after Activision/Blizzard literally killed the game's charm, this decline in players was inevitable.

The question is how low the western subscriber numbers will go before blizzard fixes their mistakes? And will they bother fixing their mistakes? Or will they just keep riding off their past reputation until Titan comes out?